After your career days are over, you may imagine puttering around the house, working in your garden, volunteering at local organizations or jet-setting off to exotic locales. Or, that all may sound miserable to you and you can’t envision ever quitting your 9-to-5!

Choosing when (or if!) to retire is a big decision with many factors. There are financial elements to consider, of course, but many personal ones as well. Either way, no matter your age now or the age when you want to retire, the sooner you start thinking about and planning for it, the more control you’ll have over what you get to do.

Financial Factors for Retirement

  • Social Security impacts
    As long as you’ve been part of the traditional workforce, a portion of your paycheck has been paid into Social Security. Depending on the year you were born, you can start drawing full benefits between ages 65 and 67, but you can start taking partial benefits as early as age 62.There are pros and cons to taking benefits early or late, and keep in mind that there is a limit to these funds and they are likely not enough to support your current (or even a significantly reduced) lifestyle. It’s best to think of Social Security as ‘supplemental income,’ and rely on savings and investments for your daily expenses.
  • Daily living expenses
    You need to know how much you spend now to calculate how much you’ll need to retire. A good rule of thumb is to expect to continue paying about 80% of your current expenses in retirement.While you’re looking at your current expenses, it may also be a good time to find ways to put more into savings. If your company doesn’t have a 401K or you’re not contributing, it’s worth finding ways to save more now to ensure a more comfortable future.
  • Savings and investments
    Once you have a good idea how much you’ll need to cover your costs in retirement, you need to calculate how much you need to save before then. If you retire at 67, and the average S. life expectancy is 78.5, that’s at least 11.5 years of expenses to cover (but you’ll likely need more than that!).Using a quick online calculator, you can plug in your data points and see what you need to do to save the right amount for retirement.

Personal Factors for Retirement

  • What do you want to do in retirement?
    Choosing when to retire isn’t just about money, it’s about your overall plans and goals for your life. If you love your job, then keep right on working! If you can’t wait to get out of the rat race but don’t want to be bored, a less stressful part-time job may be the answer. If you want to travel the world in style, you may need to build up your savings even more to help fulfill those dreams.
  • How’s your health?
    The unfortunate downside to retirement is that it usually occurs when we are much older and health problems are more frequent. If you have big plans for retirement, it’s important to take care of yourself with a healthy diet and exercise so you can do everything you dream of. Also, if your family has a history of certain health issues or medical conditions, you may want to save extra funds to cover additional healthcare costs.
  • What do you want to do NOW?
    No matter what your retirement dreams are, how you live now plays a role. If you cut your costs way back and focus on building your savings, you could retire much earlier than average, leaving you time and freedom to do what you want. If you want to invest in your business or focus on big vacations while the kids are young, that’s great too. The key is having a plan so you know what you’re working for.